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Outstanding Debts

Hi,

I have some outstanding debts (Credit Card, loan etc) and they will be paid off in May if all goes well. Once I've paid these off I'm looking to get a loan to buy a car. When the bank does a search to see my outstanding debts will the debts that I paid off show as being paid off or is there a delay to it showing on my credit file?

Thanks,

Comments

  • Malestrom
    Malestrom Posts: 983 Forumite
    Hmm...you say that you have outstanding debts. Do you mean debts that you are just paying off or debts that you have defaulted on/missed payments?

    You should write to your creditors when you make your final payment and ask them to ensure that your credit record is updated and that the debt is shown as satisfied. It should happen automatically but can take some time and occasionally doesn't happen at all, so best to be proactive. Even though your credit records show your debts as satisfied, you may still have problems getting credit, especially for something thats relatively large like a car loan. You could start rebuilding your credit worthiness by appyling for something like the Capital One credit card, which is available to everyone, even those who have a poor credit rating. It has a high APR though so use it and then pay it in full. This will help to show that you aren't going to be a risk to the loan company.
    He huihuinga taangata he pukenga whakaaro – A meeting of people; a wellspring of ideas (Maori proverb)
  • Xbigman
    Xbigman Posts: 3,906 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    If you can pay off your debts why not turn that into an asset. Tty transfering your remaining debt on to 0% APR credit cards and buy the car with the money you would have used to pay them off. Effectively a 0% loan.
    Just a thought.
    Regards


    X
    Xbigman's guide to a happy life.

    Eat properly
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  • apcrozier
    apcrozier Posts: 11 Forumite
    Sorry I should have explained. When I say I have outstanding debt I have never defaulted or had any problems. Basically I have a loan which finishes in a couple of months (Never missed a payment) and then I will have paid off my credit card (also never missed a payment) as well in a couple of months. I know that when you are assessed the lender will look at how many bits of credit you have and if you could afford to have another. I just basically wanted to know, if when they do a search on me will my file say that my credit has been paid off recently or will there be a delay in updating this info.
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    10,000 Posts Combo Breaker
    If you get a copy of your credit records from Experian & Equifax, you will see exactly what the lenders see. Basically, your credit cards & loans, the amount outstanding and a note to state whether you have ever been late or defaulted.

    It can take a few weeks for information to trickle through, but get your records & have a look so you fully understand how the system works.

    One thing puzzles me ... having paid off all your debts, why do you want to take out more? You only need about £1000 to get a car. Remember, you have to budget each month for maintenance, service, MOT, repair, petrol, parking and next year's insurance. So put these figures into your budget first, to see how much you'll have left over each month.
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • apcrozier
    apcrozier Posts: 11 Forumite
    Well basically I need to get a newer car because of work. My company are relocating and my car would not handle driving up and down the motorway everyday.
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